Torres Unveils Proposal to Lower Auto Insurance Costs

The Eastside Los Angeles state senator whose refusal two weeks ago to vote on a no-fault auto insurance bill blocked it from committee passage, Monday proposed a hybrid plan of his own, keeping the current liability system but setting limits on emotional damages and attorney fees.

The proposal by Democrat Art Torres also contains one small no-fault feature. That is an option for persons without health insurance to buy either $1,000 or $2,500 in medical costs accident coverage collectible from their own insurer, regardless of who is at fault in the accident.

Although the Torres plan, like others, is directed at providing a lower-cost auto insurance policy, the price has not been worked out, aides said. They said the goal was to cut auto insurance prices about 20% below current premiums.

Torres introduced his measure in the form of amendments to a bill by state Sen. Alan Robbins (D-Tarzana), which has passed the Senate and is pending in the Assembly’s insurance committee.

Torres’ proposal was immediately criticized by lobbyists for insurers and trial lawyers. The insurers said they did not like it because it kept the liability system. The lawyers did not like the caps on fees and damages.

Torres took the opposition as an encouraging sign.

“I’m not surprised that both sides are angry,” he said. “A good compromise involves having both sides angry. Both must give. I’ve been racking my brains to see what would be the best solution and I think this is a start.”

Torres’ proposal include these provisions:

* The minimum required liability insurance would be reduced to $10,000 individual coverage, $20,000 group coverage and $3,000 property damage from the current limits of $15,000/$30,000/$5,000.

* All disputed claims would have to be submitted to arbitration. Arbitration awards could be overturned by the courts only if there was convincing evidence that the arbitration proceedings were prejudicial.

* Emotional damages would be limited to 25% of economic damages in the case of non-serious injuries, and could not exceed $1,500. There would be no limit on emotional damages in case of serious injuries.

* Attorney fees would be capped at 10% of damages collected before arbitration, 15% if arbitration took place, and 33% if the arbitration award was appealed to the courts.

* Bad-faith suits against insurers by third parties would be permitted again, but punitive damages would be limited to 25% of economic and emotional damages.